Mixed financial results for extended recovery care

"After rent, staffing, and other overhead costs, it is difficult to break even within our recovery care center," he says. "But when you look at the surgery center side of the business, we are doing well with the cases we can accept now as compared before the recovery care center’s opening.

Being able to keep patients longer than 23 hours enables a same-day surgery program to handle more complicated cases such as total knee or joint replacements, mastectomies, and breast reconstruction, says MarkMayo, facility director for Valley Ambulatory Surgery Center in St. Charles, IL, and executive director of the Illinois Freestanding Surgery Center Association. These cases require longer stays for observation or monitoring and might generate higher levels of reimbursement, adds Mayo, who is consulting editor for Same-Day Surgery.

Even with the ability to handle more complicated cases, your recovery care center won’t see Medicare surgical patients, he says. Because Medicare rules require patients who will need observation and monitoring for an extended stay to have surgery at a hospital, recovery care centers don’t see Medicare surgery patients. This might change, says Mayo.

Mayo and representatives from other same-day surgery associations will meet soon with the Medicare Payment Advisory Committee (MedPAC), a Washington, DC-based advisory group to Congress. The group will present information to the MedPAC staff to use as they develop a report on the efficacy of post-surgical care centers that Congress requested, says Mayo. The report should be completed by the end of 2000, he adds.

If the findings are supportive of surgical recovery care centers, the door may open for same-day surgery programs and associated recovery care centers to accept Medicare patients for a greater number of procedures, says Mayo.

Communicate your plans

In the meantime, let your key third-party payers know that you are planning a recovery care center, says JoniSteinman, managing principal for AUSMS Healthcare Consultants in San Diego.

Reactions to recovery care vary from region to region, says Steinman. Let your payers know before you open what you are planning, why you are offering the service, and how it will benefit their members and their plan, she says.

"Focus your initial talks with payers who are receptive to new ideas and provide factual backup that shows how you will provide a higher nurse-to-patient ratio, a lower cost of care, and a more enjoyable experience for the patient," Steinman suggests.

Costs are significantly lower with recovery care centers, says Steinman. In an unpublished study conducted by AUSMS Health Consultants, the cost of a hysterectomy in a same-day surgery center with a recovery care center was $1,810 vs. a hospital cost of $3,130.

Cost of a shoulder manipulation at the surgery center and recovery care center was $2,892 as compared to $5,472 in a hospital setting. Offering payers proof of the savings they can expect can be accomplished by surveying local hospitals and comparing their numbers to your costs, Steinman says.

Also pay attention to when your payers want you to identify the patients as recovery care admissions, suggests DebbieProctor, RN, department head of the outpatient center and surgical admissions center at Promina DeKalb Medical Center in Decatur, GA.

"At first, we let physicians schedule patients for our short-stay unit at the time they scheduled the surgery," says Proctor. Payers, who don’t want patients staying overnight unless really necessary, objected to this practice. Now the decision to send the patient to short-stay is made in the post-anesthesia care area, she says.

Educate payers

Educating your payers is important, says JackieStreet, chief executive officer at Idaho Falls (ID) Recovery Center. "We had a difficult time at first with our payers because, as a recovery care center licensed as a hospital, we didn’t fit the traditional definition of a hospital for the payers," she says.

One of the main problems was the flat fee charged by Street’s facility. "Everyone wanted an itemized bill, and Medicare requires it," she says. Because Street’s facility accepts Medicare patients for nonsurgical procedures such as chemotherapy, IV therapy, and blood transfusions, she switched to an itemized bill to accommodate Medicare.

"I was making progress with my other payers by showing them how an itemized bill would require additional staff and overhead charges to generate the bill that would increase the overall amount, but we are just too small to fight Medi-care," she says.

Although many third-party payers follow Medicare’s lead in determining what procedures to cover and where they should be performed, a same-day surgery manager should not let the lack of Medicare reimbursement stop an investigation into the viability of a recovery center, says Steinman.

There are many benefits to a recovery care center for same-day surgery programs, and education of third-party payers can result in reimbursement of recovery care, she says. Setting up a recovery care center now can give you a competitive advantage if recovery care centers are approved for Medicare patients, Steinman points out.

Even without Medicare patients, your surgery center can benefit financially from new patients that can be served, says Steinman.

"You can attract a more diverse case load, a different patient population, and new surgeons if you offer the capability of handling more complex cases," she explains. n

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